Nike faced hard call to dump Lance Armstrong

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Nike ended its deal with cyclist Lance Armstrong after a report alleging he used banned substances.

By Mae Anderson
Associated Press
October 19, 2012

NEW YORK — Nike forgave Tiger Woods after he apologized for cheating on his wife. It welcomed back Michael Vick once he served time for illegal dogfighting. But the company dropped Lance Armstrong faster than the famed cycler could do a lap around the block.

The world’s largest clothing and footwear maker has stood by athletes through a number of scandals over the years, but this week it became the first company to sever ties with Armstrong following allegations that he used illegal drugs to boost his performance during his 20-plus year career.

At least five other companies followed Nike’s lead, highlighting the tricky relationship that evolves when marketers sign multimillion-dollar deals for celebrities and athletes to endorse their products. Everything a celebrity endorser says and does could negatively impact the company he or she represents. And when something goes wrong, companies act as the judge and jury when deciding whether to continue those deals.

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‘‘The tighter the association and the more intimate the relationship, it can sort of be like breaking up a marriage,’’ said Allen Adamson, managing director of branding firm Landor Associates.

Companies typically include some sort of ‘‘morals clause’’ in endorsement deals. The specific language can vary, but the clause basically allows a company to cancel the contract if a celebrity does something that reflects poorly on the brand.

‘‘It’s really hard to know today when an issue will spin out of control or just go away,’’ said Adamson. ‘‘The cost of a celebrity endorsement is huge, so pulling the plug is a really big decision.’’

Nike stood by golfer Tiger Woods after he admitted to a string of infidelities and had a brief stint in a rehab treatment facility for sex addiction.

Similarly it stuck by Los Angeles Lakers star Kobe Bryant in 2003 after he was arrested on sexual assault charges that were later dropped. Nike, however, didn’t use the basketball player in advertising again until 2005.

In the case of Vick, Nike signed the NFL quarterback in 2001, but ended that pact in August 2007 after he filed a plea agreement admitting his involvement in a dogfighting ring. Then Nike re-signed Vick, who now plays with the Philadelphia Eagles, in July 2011. The company said at that time that it didn’t condone Vick’s actions, but was supportive of the positive changes he had made to better himself off the field.

In the latest case, Nike said on Wednesday that it would end its relationship with Armstrong, 41, a week after the US Anti-Doping Agency released a report detailing allegations of widespread doping by Armstrong and his teams when he won the Tour de France seven consecutive times
. Armstrong retired from cycling a year ago and said in August that he would no longer fight the doping allegations that have dogged him for years.